Reducing Our Impact

Management of the environmental aspects of our operations is fundamental to our commitment to environmental responsibility. We continually assess our manufacturing processes, facilities and vehicle fleet and seek ways to reduce their impact.

Data in this section on environmental performance represent total quantities for Xerox's manufacturing, research, development and equipment recovery/recycle operations in seven countries. Normalized values for 2010 forward have been calculated using Xerox revenue figures inclusive of ACS. Unless otherwise noted, all numbers represent worldwide totals and are reported in generally accepted international metrics.

The data presented in this section are based on actual measurements to the extent possible. In situations where direct measurements are not available, engineering calculations or estimates are used as a proxy. We continue to strive to increase the accuracy of the data reported.

Integrating Environmental Priorities into Manufacturing and Distribution Operations
All of Xerox's manufacturing and distribution operations employ an ISO 14001-conforming environmental management system. This management system approach establishes a framework to ensure compliance with regulations and Xerox standards, identify environmental impact, and set objective and performance targets. The ISO 14001 system requires that
day-to-day business activities be integrated with environmental planning and program management. It encourages innovative engineering solutions, creative partnerships and employee involvement. Our major manufacturing operations have been certified to ISO 14001 since 1997; U.S. equipment distribution centers achieved certification in 2010. New plants are scheduled for certification as they become operational. Quarterly status meetings and integration with a newly deployed scorecard promote visibility, best practice sharing and innovation.

Reducing Our Company-Wide Carbon Footprint: "Energy Challenge 2012"1
We believe that Xerox, like all global businesses, should do its part to reduce the risks of climate change. In 2003, we made a public commitment to reduce greenhouse gas (GHG) emissions – our carbon footprint – by joining the U.S. EPA Climate Leaders program and launching an internal program known as Energy Challenge 2012. We adopted a goal of reducing by 10% our absolute GHG emissions across all company operations, by 2012, from a 2002 baseline. We met this target six years ahead of schedule and in 2007 we set a new and challenging goal to reduce our GHG emissions by 25% by 2012, from the 2002 baseline. Through 2011, we have cut emissions by 36%, or 182,000 tons of carbon dioxide equivalents (CO2e) and energy consumption was down 27% compared with 2002. In 2010, we began the effort of establishing the GHG emissions inventory for ACS. The new corporate goal to be announced in 2012 will be inclusive of ACS.

1Energy and GHG emissions totals are associated with fuel consumption by company-owned fleet and natural gas/electricity consumption in facilities with square footage of 17,500 or greater. Vendor invoices from utility and fuel providers are the preferred source of data; when unavailable, estimations have been used.

Greenhouse Gas Inventory
In keeping with the international guidelines of the Greenhouse Gas Protocol developed by the World Resources Institute and the World Business Council for Sustainable Development, we track the six major GHGs: carbon dioxide (CO2); methane (CH4); nitrous oxide (N2O); hydro fluorocarbons (HFCs); perfluorocarbons (PFCs); and sulfur hexafluoride (SF6). We express our carbon footprint in terms of carbon dioxide equivalents (CO2e). Energy sources account for more than 99% of our GHG emissions. Our GHG inventory includes direct emissions from the combustion of fossil fuels, primarily natural gas, and indirect emissions from purchased electricity and steam at our manufacturing sites, offices and warehouses. The inventory also includes the combustion of gasoline and diesel fuels in our service and sales vehicle fleet. In accordance with the Greenhouse Gas Protocol, inventory adjustments are completed each year as a result of the opening and closing of facilities and changes to the vehicle fleet. We have expanded our GHG tracking to include Scope 3 emissions, beginning with employee business travel.

There are many challenges in assessing Scope 3 emissions, including the large number of variables, the difficulty in collecting data from suppliers, and increasing uncertainty in the data as the sources become further removed from the company itself. We have begun calculating Scope 3 according to the WRI Scope 3 Accounting Standard. We will use the information to prioritize our GHG emission reduction opportunities and to integrate consideration of carbon impact into sourcing and internal decision-making.

Our first Scope 3 calculation exercise focused on a representative multifunction printer. Emissions throughout the product life cycle were included in the model. As expected, Scope 3 emissions per unit are higher than Scope 1 or Scope 2, with the highest contribution being from product use, followed by consumables and raw material extraction and processing. This information is consistent with previous life cycle assessment work we have conducted, and continues to guide our product design efforts.

Due to the complexities of measuring and the changing dynamic of supply chains, these numbers represent a snapshot in time based on one product and are a best effort to evaluate the relative contribution to Scope 3 of the key segments of our value chain. While these calculations are not precise enough for carbon reporting purposes or company/product comparisons, they do provide value as a diagnostic tool to help prioritize where efforts may have the biggest opportunity.

In 2011, Xerox GHG emissions totaled 317,000 metric tons of CO2e. About 53% were indirect emissions from purchased electricity and steam. The remaining 47% were direct emissions from the combustion of natural gas, gasoline and diesel fuel. Xerox-owned or leased facilities, such as manufacturing sites, offices and warehouses, are associated with 72% of our GHG emissions. The remaining 28% are emissions from our service and sales vehicle fleet and other mobile sources.

Our ultimate goal is to be climate-neutral. While our strategy for achieving that goal is evolving, our first priority is to reduce our total Green House Gas emissions by lowering the energy intensity of our operations. Xerox is finding success with the following approaches:

Shifts Toward More Energy-Efficient Technologies, such as emulsion aggregation (EA) technology, which is estimated to generate 28% fewer GHG emissions in the manufacturing process than conventional toner.

Increased Reliability of Xerox Equipment and Parts reduces service calls, which results in fewer miles driven by Xerox technicians and less gasoline consumed. Longer-lasting parts also mean that less manufacturing energy is invested over the life of a Xerox product.

Equipment Upgrades and Energy Management Programs such as more efficient boilers and digital control of HVAC systems. Some of our facilities save energy through "free" cooling. In winter months, the facilities cool process water by running it through outdoor pipes instead of using chillers, which are the equivalent of industrial air conditioners.

Use of Renewable Energy Sources further reduces GHG emissions. For example our facilities in the U.K. are 100% powered by Green Energy. Other facilities, such as Webster, New York, and Wilsonville, Oregon, voluntarily use renewable energy or credits that offset a portion of electricity consumption.

Climate Change Risks and Opportunities
Xerox has examined the regulatory, physical and commercial risks and opportunities associated with climate change. We are well positioned for current and potential future regulation by our investment in a robust GHG emission inventory. We will continue to invest in energy-efficient product designs and solutions to meet future customer demands and product-centric regulatory requirements. We are currently gathering Scope 3 emissions data and other key metrics to assess climate change risk in the supply chain.

Xerox is not subject to unique risks due to changing weather patterns, rising temperature and sea level rise. In the case that our operations or customers' operations are impacted by unpredictable events such as extreme weather, the company's well-defined business continuity plan will be executed. It covers communication with employees and customers, management of employee health and safety issues, business resumption processes, as well as interaction with government organizations.

Air Emissions
Xerox has significantly reduced manufacturing air emissions over the past 20 years and continuous improvement remains a priority.

Most of our non-combustion air emissions originate from manufacturing operations related to the production of imaging supplies such as toner, photoreceptor drums and belts, and fuser rolls. Approximately 20 metric tons of volatile organic process emissions were emitted to the air from these production activities in 2011, a 26% decrease from 2010. Approximately 13 metric tons of these process air emissions were volatile organic compounds (VOC). In addition, 7 metric tons of methylene chloride and acetone, which are excluded from EPA's definition of VOC due to negligible photochemical reactivity, were emitted and are reported in the graph below as "non-VOC." These reductions demonstrate the success of our design initiatives to minimize environmental impact: year-over-year emission reductions came primarily from lower production volumes of legacy products coated using organic solvents, and production declines attributable to longer-life components.

A subset of these volatile organic process emissions is defined by the United States Environmental Protection Agency (EPA) as hazardous air pollutants (HAP). In 2011, Xerox reported worldwide air emissions of approximately 12 metric tons of HAP under national toxic chemical release regulations, including the United States' Toxic Release Inventory (TRI) program. Methylene chloride, methyl isobutyl ketone and 1,3-Butadiene represent approximately 90% of these HAP emissions.

Ozone-Depleting Substances
Xerox policy prohibits the use of ozone-depleting substances (ODS) as ingredients in products, spare parts, accessories and packaging. Ozone-depleting substances are used as refrigerants in facility and vehicle air conditioning systems and various food/equipment-cooling systems. Although ODS may be released during the normal operation and failure of these systems, the total amount released is not significant from a company-wide perspective. Elimination of ODS as refrigerant is managed in a fashion consistent with government phase-out programs.

Toxic Chemical Releases
Releases to the environment of materials used in Xerox's worldwide operations must be annually evaluated and reported to government agencies under national toxic chemical release reporting regulations, such as the Toxic Release Inventory (U.S.), the National Pollution Release Inventory (Canada) and Pollutant Release and Transfer Registers (Europe). Xerox's reported releases in 2011 were 15% lower than 2010 levels and 64% lower than 2007 levels.

Xerox strives to beneficially manage these materials whenever possible. In 2011, over 84% of materials reported under national toxics reporting programs were beneficially managed on site or at approved treatment, storage and disposal facilities.

In 2011, all operations with on-site reportable toxic chemical releases to the air, land, or water in amounts of greater than one metric ton established goals, targets and objectives related to those releases. Progress against these goals will be reported annually commencing with Xerox's 2013 Global Citizenship report.

Spills and Accidental Releases
Preventing environmental releases of regulated materials to air, soil and water is our goal. In 2011, our North American operations identified ten reportable accidental spills/releases compared with 8 in 2010. Two of the ten events in 2011, however, were unrelated to Xerox operations (e.g., from an employee-owned vehicle but occurring on Xerox property). Corrective actions were taken in all cases. The ten events included:

5 petroleum spills/leaks totaling approximately 76 liters

3 refrigerant leaks totaling 2100 kg

1 4 liter solvent leak

1 49,000-liter water discharge resulting from a rapid snowmelt condition.

Hazardous Waste
We strive to minimize the generation of hazardous waste and to employ beneficial treatment methods when hazardous wastes are generated. The company does not export hazardous waste to developing nations.

Non-hazardous Solid Waste
Our manufacturing operations generated 54,000 metric tons of non-hazardous solid waste in 2011 compared to 57,000 metric tons in 2010. The increase in solid waste generated was a result of insourcing teardown and scrapping of equipment returns that had previously been conducted by a contracted supplier. The increased volume of materials was comprised of material handling products such as wood pallets. Those products were recycled.

The waste stream consists primarily of paper, wood pallets, plastics and packaging waste such as corrugated cardboard. It also includes manufacturing-related wastes such as scrap metal, waste toner, waste batteries and lamps, and miscellaneous trash. End-of-life equipment and parts that are returned to Xerox for processing made up 70% of the non-hazardous solid waste managed by Xerox operations in 2011. We have had waste reduction efforts in place for many years, which include reusable boxes, pallets and containers for parts delivery, reuse of toner that is outside the acceptable size range during manufacturing, and reusable totes for recycling scrap metal and paper.

We recycled 94% of our non-hazardous solid waste in 2011. The facilities in Wilsonville, Oregon and Venray, Netherlands joined the Emulsion / Aggregation Toner manufacturing operation in Webster, NY achieving zero waste to landfill. The Fuser Manufacturing operation is nearing that goal as well. However, the corporate performance remained at 92% due in large part to a one-time disposal into a landfill of toner from the Xerox Research Centre of Canada.

Water Consumption and Treatment
As part of our commitment to conserve resources, we monitor water consumption across our manufacturing, distribution and R&D facilities worldwide. We have set a corporate goal to reduce water consumption by 21% by 2014 (against a baseline of 2009) and are in the process of establishing a long-term goal. Water consumption is down 15% in 2011 compared to 2010. The decrease has many contributing factors including process improvements, facilities maintenance, and production decreases in manufacturing. 2011 was a year in which many water conservation projects were implemented and began to contribute to a reduction in the amount of water used by our operations group. Project examples include:

Webster, New York: several operations buildings had cooling systems optimized, right sized, or converted in a way that eliminated the use of single pass cooling.

Wilsonville, Oregon: a water intensive component part manufacturing line was studied and optimized, reducing the overall water usage by more than 9 million liters (30%).

Dundalk, Ireland: the innovative use of water softening techniques improved the efficiency of our cooling water towers yielding a 60% reduction in the amount of water required to support operations.

The water discharges at manufacturing sites are monitored to validate compliance with local sanitary sewer discharge limits. Wastewater from manufacturing processes is treated, as necessary, before being discharged into local sanitary sewers. The treatment includes adjusting pH and, as necessary, removing suspended solids. In addition, the company engages best management practices to prevent unwanted pollutants from entering waterways via surface contamination and run-off. Extensive sampling of wastewater, discharged to both sanitary and storm sewers, ensures that discharged water meets our strict requirements

Environmental Remediation and Compliance
For more than 25 years, Xerox has conducted a proactive program to identify and clean up contaminated sites around the world. These efforts include a voluntary assessment program, begun in 1985, which resulted in identifying 68 facilities and operations sites that have required remediation. As the sites were identified, the company, as necessary, took immediate measures to ensure the protection of employees, neighbors and the environment from possible adversity.

To accelerate some of the remedial timeframes, we concentrated our initial efforts on source areas of contamination. In most instances, source area remedial measures were very successful in achieving their reduction goals. Many of these sites may now be managed with migration control techniques that limit potential movement and exposure. As a result of our extensive remedial efforts, some sites have been remediated to the point where they no longer require corrective actions and have subsequently allowed our Corporate Real Estate Department to sell some of these as excess properties for redevelopment or to terminate active leaseholds.

Today, only nine of the original 68 sites require further remedial or control measures. The total number of sites was increased in 2010 by one as a result of a recent acquisition. It is anticipated that two additional sites will complete active remediation in 2012.

In addition to using conventional techniques for groundwater pumping and soil excavation, Xerox has been at the forefront of developing and using innovative remedial technologies. These include techniques that enhance the recovery of contaminants such as High Vacuum 2-Phase Extraction® and bedrock and hydraulic fracturing. In addition, contaminants are converted to less-harmful substances through technologies such as enhanced biodegradation and chemical oxidation.

Compliance Penalties
Xerox requires its various operations and subsidiary organizations around the globe to report allegations of regulatory violations to Xerox's corporate Environmental, Health, Safety and Sustainability group for tracking, evaluation and corrective action, where appropriate. Based upon this reporting system, Xerox identified one instance where it was subject to a compliance penalty in 2011 – a $300 fine for Injury and Illness Prevention Program deficiencies and obstructed sprinkler head in San Francisco, California. All issues have been abated as necessary, closed out with the relevant authorities, and appropriate controls enacted to ensure ongoing compliance

Our Progress

"All of us at Xerox are determined to build a company that serves all its stakeholders - the shareholders who invest in us; the customers who trust us to make them better; the employees who bring their minds and hearts to our belief that good financial results and good citizenship are synergistic; the communities in which we live and work and that deserve our engagement; and, ultimately, the planet, which we all have an obligation to preserve and sustain."

Preserving the Planet

As part of our commitment to conserve resources, we monitor water consumption across our manufacturing, distribution and R&D facilities worldwide. Water consumption has decreased 37% since 2007 and is down 15% in 2011 compared to 2010...
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Preserving the Planet

Scope 1 and 2 greenhouse gas emissions are down 36% and energy consumption is down 25% from 2002 in our Technology business. The reductions are the result of improved energy efficiency, new technologies and improved energy management practices...
See More

Preserving the Planet

In 2011, 100% of all of our new eligible products met the current ENERGY STAR (July 2009) requirements. Continued success in cutting the power consumption of our laser-based printing products has been achieved by adjustments in the fuser design...
See More

Preserving the Planet

The Xerox Green World Alliance reuse/recycle program for imaging supplies is central to our commitment to waste-free products. We currently have more than 35 countries participating in the Xerox Green World Alliance...
See More

Preserving the Planet

We are in the process of expanding Greenhouse Gas tracking to include Scope 3 emissions, beginning with employee business travel. We measured these 2011 Scope 3 emissions at 12K metric tonnes of CO2e, down 14% from 2010...
See More

Preserving the Planet

Reported toxic chemical releases and transfers were 15% lower than 2010, primarily due to the reduced production of older products. Methylene chloride releases and transfers, which account for over 50% of reported toxic chemicals...
See More

Photoreceptor plant cuts power consumption through heat recovery

A team in Venray, the Netherlands initiated a project to reduce the electrical power consumption and carbon footprint at a photoreceptor plant. By implementing a heat recovery system to preheat intake air, the team delivered annual improvements of a 520 metric tons reduction in the carbon footprint and cost savings of $132,300.

Three Xerox manufacturing sites now zero waste-to-landfill

Facilities in Wilsonville, Oregon and Venray, The Netherlands joined the Emulsion / Aggregation Toner manufacturing operation in Webster, New York in achieving zero waste to landfill. Through investigation and partnerships, opportunities were identified for all manufacturing, office, and cafeteria waste to be reused, recycled, composted, or sent for energy-from-waste recovery.

The Xerox Board of Directors: Maintaining independence

Sustaining Business

Based on standards for independence developed by the New York Stock Exchange, the Xerox Board of Directors is currently 90% independent. It includes one non-independent director: Xerox Chairman and CEO Ursula M. Burns.

Learn more about the Board's independence and our governance policies.

Voice of employee survey

Evolving the Workplace

74% of surveyed employees responded favorably to the statement "My work gives me a feeling of personal accomplishment" on our proprietary Voice of the Employee Survey.

The survey allows managers to create a personal pulse survey to assess their employees' satisfaction on their job, workgroup, manager, and on Xerox as a whole.

In the past three years, we have surveyed 100% of the global Xerox population in 48 countries and in 25 languages. Each manager receives a personalized report to assist in developing action plans where needed. In addition, we capture global trend data and employee ideas.

Employee Diversity – Women employees

Evolving the Workplace

We gain a competitive advantage as we continue to draw on the experience and creativity of a well-balanced, diverse work force. That means we're better able to understand and meet the changing demands for our products and services. Simply stated, a balanced work force makes good business sense.

49.8% of employees in U.S. are women and women represent 25% of the executive and senior level managers in the U.S. Diversity reporting is not tracked in most other countries.

Employee Diversity – Minority employees

Evolving the Workplace

Minorities represent 37.5% of employees and 13.2% of the executive and senior level managers in the U.S. Diversity reporting is not tracked in most other countries.

Employees with different ways of thinking – and different ways of perceiving our world – are employees who create innovative solutions. In a business like ours, whose lifeblood is fresh ideas, this variety of perspectives is a priceless resource – and a key to achieving critical business results.

Monitoring the safety of our employees

Evolving the Workplace

We strive toward a goal of zero injuries, with continual improvement in safety performance in both injury frequency and severity. In 2011, there was a 1% reduction in the frequency of injuries compared to 2010 performance. Since 1996 there has been a 56% reduction in total recordable injury rate.

Reporting and monitoring of injury frequency rates occurs for different geographies and organizations. The reporting of work-related injuries, illnesses and fatalities is based on the same criteria for all operations, worldwide, regardless of the geography in which they reside.

Preventing injuries and illnesses

Evolving the Workplace

We strive to prevent all injuries and illnesses and place special emphasize on the elimination of serious incidents – those that are significant enough to require missed days of work. 2011 proved to be a challenging year and additional mitigation initiatives have been put in place. Since 1996 there has been a 48% reduction in the days away from work injury rate.

Topping the competition

Serving Customers

Xerox is the leader in equipment revenue market share for the tenth straight quarter (1Q2012). We offer the industry's broadest portfolio of document technology and services for businesses of any size, in any industry, anywhere around the world.

Innovating for the future

Serving Customers

The Xerox group garnered over 1,600 patents total. Xerox was granted 1,030 U.S. patents and our joint venture in Japan, Fuji Xerox Co. Ltd., received 588 U.S. patents. Xerox and Fuji Xerox collectively invest about $1.5 billion annually in research, development and engineering.

Measuring customer satisfaction

Serving Customers

Service and support for Xerox products earned five consecutive industry certifications from 2006-2010. All forms of customer support – phone, on-line, on-site – were evaluated by independent service industry experts who recognized our support services as among the best in class.

Investments in J. D. Powers certification in prior years have ensured process excellence in technical service delivery. In 2011, we chose to invest in a new customer satisfaction process to ensure a stronger focus on understanding and fulfilling customer needs and expectations.

The new process solicits feedback from our technology customers around the globe and provides detailed insights that help us identify systemic issues and make the necessary changes that ensure strong customer satisfaction. Improved closed-loop follow-up processes also enable faster responses to individual problems.

2008

2009

2010

Achieved certification in the J.D. Power and Associates program for Certified Technology Service and Support.

Achieved certification in the J.D. Power and Associates program for Certified Technology Service and Support.

Achieved certification in the J.D. Power and Associates program for Certified Technology Service and Support.

Industry analysts rate Xerox products and services as market leaders

Serving Customers

The Xerox commitment to our customers has gained worldwide recognition. Independent Industry analysts rate our products and services as leaders in multiple categories. Helping customers better manage their print environment led Gartner to place us in the Leaders Quadrant of the 2011 Magic Quadrant for Managed Print Services Worldwide, while International Data Corp. (IDC) MarketScape lists us as a Market Leader for managed print services for the third year in a row. And it's not just our award-winning technology that garners all the accolades. Gartner placed Xerox as a global leader in the Comprehensive Finance and Accounting Business Process Outsourcing arena and also noted our leadership for Help Desktop Outsourcing Services in North America.

The Xerox Foundation

Caring for Communities

In 2011, 1,672 non-profit organizations, colleges and universities received direct financial support from the Xerox Foundation through grants, matching gifts or community involvement activities. We focus our investments in the following areas:

The Xerox Community Involvement Program

Caring for Communities

The Xerox Community Involvement Program marries the voluntary spirit of our employees with Xerox funding to participate in the betterment of the communities where we live and work. In 2011, 12,291 Xerox people participated in 751 projects and the Xerox Foundation invested over $1 million in the program.

Conserving water

Preserving the Planet

As part of our commitment to conserve resources, we monitor water consumption across our manufacturing, distribution and R&D facilities worldwide. Water consumption has decreased 37% since 2007 and is down 15% in 2011 compared to 2010.

Reducing greenhouse gas emissions

Preserving the Planet

Scope 1 and 2 greenhouse gas emissions are down 36% and energy consumption is down 25% from 2002 in our Technology business. The reductions are the result of improved energy efficiency, new technologies and improved energy management practices.

Having met our Energy Challenge 2012 goal, we are in the process of establishing a new baseline and target.

New products achieve the ENERGY STAR® rating

Preserving the Planet

In 2011, 100% of all of our new eligible products met the current ENERGY STAR (July 2009) requirements. Continued success in cutting the power consumption of our laser-based printing products has been achieved by adjustments in the fuser design, changes to the properties of the toner, more-efficient electronic controls and the workings of the xerographic system as a whole.

See more detailed information on Energy Star ratings for Xerox Products.

The Xerox Green World Alliance

Preserving the Planet

The Xerox Green World Alliance reuse/recycle program for imaging supplies is central to our commitment to waste-free products. We currently have more than 35 countries participating in the Xerox Green World Alliance. Worldwide, our customers returned more than 3.43 million cartridges, toner containers and other used supply items in 2011. Although Xerox's consumables returns programs have been in existence for two decades, we enhanced the program in 2010 by launching an improved return process for our Canadian operations.

Reducing emissions by reducing employee air travel

Preserving the Planet

We are in the process of expanding greenhouse gas tracking to include scope 3 emissions, beginning with employee business travel. We measured these 2011 scope 3 emissions at 12,000 metric tonnes of CO2e, down 14% from 2010. A decrease in employee air travel has been achieved through the increased use of videoconferencing and other technology. We're currently in process of collecting scope 3 emissions data on product transportation from third-party carriers.

Assessing scope 3 emissions is challenging but we are making progress and are making our calculations according to the WRI Scope 3 Accounting Standard. We will use the information to prioritize our greenhouse gas emission reduction opportunities and as part of our carbon impact assessments.

Reducing toxic releases

Preserving the Planet

Reported toxic chemical releases and transfers were 15% lower than 2010, primarily due to the reduced production of older products. Methylene chloride releases and transfers, which account for over 50% of reported toxic chemicals, were lower by approximately 15 metric tonnes.